November 21, 2009, 07:00:00AM. By Heidi Turner

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San Diego, CA: If you were one of the Californians who recently had their claims denied by the Life Insurance Company of North America (LINA), your future might soon be looking a bit brighter. The California Department of Insurance has ordered the insurance company to review every disability insurance claim it denied between January 1, 2005 and December 31, 2007. This means that people whose disability claims were denied may see that decision reversed.

The claims review is part of a settlement reached between LINA (whose parent company is CIGNA) and the California Department of Insurance, which has also charged LINA a fine of $600,000. The California Department of Insurance alleged that LINA was ignoring claims that may have been perfectly valid.

In fact, according to the Department of Insurance, LINA may have actually denied cases before receiving proof that the clients were medically entitled to insurance payouts. It also allegedly ignored vital information that could have resulted in certain claims being approved.

LINA is not the only—or even the first—insurance company to be accused of denying benefits to its policyholders. However, such practices certainly do not rouse public sympathy for an industry whose image is already tarnished.

The settlement with the California Department of Insurance means that some LINA clients will receive the benefits they were originally denied. However, that does not mean that the process will be easy. LINA still has to determine which clients were unfairly denied their benefits. Not everyone whose claim was denied will see a reversal of that decision.

There are other issues that compound matters, as well. People who paid their insurance premiums faithfully every month, only to have their disability claims denied, may have been forced to pay their medical bills out of pocket, or to go without treatment entirely because they could not afford it. As a result, their finances, health, and quality of life suffered—simply because their insurance company decided to ignore vital information about their disability claims.

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